[14PacRimLPolyJ713] The Japanese Antimonopoly Act and Non-Assertion of Patents Provisions: Microsoft's Conflict with the Japanese Fair Trade Commission

Abstract:

Abstract: In recent decades, Japan has strengthened its antimonopoly regulations.
Now, a country that historically favored internal collusion continues to develop a
stringent antimonopoly regime that encourages competition. The Japan Fair Trade
Commission ("JFTC") enforces the Japanese Act Concerning the Prohibition of Private
Monopoly and the Maintenance of Fair Trade ("Antimonopoly Act") and its provisions
dealing with unfair trade practices. The JFrC takes a strong stance in enforcement of the
Act and violators follow its recommendations.
The JFTC has charged Microsoft Corporation ("Microsoft") with abuse of a
dominant bargaining position and unfair trade practices in its use of restrictive provisions,
such as non-assertion of patents provisions, in contracts and licensing agreements.
Microsoft has removed the non-assertion provision from future contracts of its own
accord, but indicated that it will continue to fight the JFTC's recommendation that the
provisions be removed from existing contracts. Cooperating with the JFTC and
removing the provision will lead to an improved image in Japan and will ensure that
personal computer manufacturers will continue to develop new and innovative
technologies, but removing it may also lead to backlash and an influx of litigation against
Microsoft. In light of the plethora of potential problems that could result from a finding
of illegality, Microsoft should continue to defend the non-assertion of patents provision
and contest any unfavorable rulings from the JFTC.